Corbett budget seeks spending cuts, plans no tax hike

By Amy Worden and Angela Couloumbis, Inquirer Harrisburg Bureau

HARRISBURG - In laying out his $27.1 billion budget plan Tuesday, Gov. Corbett once again stuck to his pledges: He is reining in spending by Pennsylvania's government, and he isn't raising any taxes.

The spending blueprint for the fiscal year that begins July 1 echoed Corbett's first budget proposal by slashing aid to colleges and scaling back programs for the poor, elderly, and disabled - while reducing corporate taxes as a route to job creation and adding some money for public schools.

His spending plan also represents a slight decrease from last year's. And it is noteworthy for what he left out: He did not renew a call for tuition vouchers or privatization of the state liquor system.

"Today I bring before you a budget grounded in difficult realities but framed in the optimism that we are solving our problems," Corbett said in his 35-minute address to the General Assembly. "Once again, revenues do not match mandated, escalating costs. That means we must continue the course bravely charted by this assembly in the year just passed."

The Republican governor's second budget continued his push to pare down spending in the costliest state departments - Education and Public Welfare. But this time, he also proposed overhauling the way billions of tax dollars are spent in those areas.

He called for directing money down to counties and school districts in the form of block grants - single appropriations of funding - rather than broken down by program area. That, he said, would give local officials much greater say in deciding how to spend state money.

Reaction, predictably, followed party lines. Republicans in the legislature praised Corbett's plan as fiscally responsible at a time of economic uncertainty and amid rises in so-called "mandated" costs, such as public employee pensions.

"The budget fits the times we are in," said Senate Majority Leader Dominic Pileggi (R., Delaware). "It's a no-frills budget that reflects a long-term view to create jobs in Pennsylvania."

Democrats assailed the plan as an assault on education, a boon to corporate interests, and a blow to the most vulnerable. "He's spent a year putting his foot on the neck of working people and the poor," said Sen. Vincent Hughes of Philadelphia, the ranking Democrat on the Senate Appropriations Committee. "It sends a message to where this governor's head is at. He doesn't give a damn about low-income people."

Corbett called his budget both "lean and demanding," one that brings about reform that will, he believes, change the culture of government in Harrisburg from "one of entitlement to one of enterprise."

In his most far-reaching proposal, the governor explained that he wants to transform the way the state distributes funding to school districts and counties for a range of social-services programs, among them counseling, substance-abuse treatment, and transportation for the elderly and disabled.

Instead of funneling money to specific programs - for instance, for services provided to victims of domestic violence - block grants would be delivered as a single appropriation, allowing counties to decide how they wanted to distribute the money within the area of human services.

Corbett said doing so would cut through the "thicket of outdated and time-consuming regulations and mandates."

Former Gov. Ed Rendell, Corbett's Democratic predecessor, stressing he had not seen Corbett's speech and did not know any particulars, said block grants afford greater local control. But Rendell said there should be "guidelines" lest local decisions create "havoc." For instance, he said, "A local school district could decide, 'We're not going to teach anything about the civil rights movement.' "

Several Philadelphia area officials, all Democrats, said that while they support the concept of a block-grant approach to social-services funding, they do not want to lose $170 million next year for those services, as Corbett has proposed.

"More flexibility with less money is not a formula for success," said Mayor Nutter, who attended the budget address. Donald F. Schwarz, deputy mayor for health and opportunity, estimated a $42 million impact on the city's welfare system, much of it in cuts for mental-health and homeless services.

Montgomery County Commissioner Josh Shapiro said the proposed cuts shift more burden onto counties, some of which had to raise taxes in the current fiscal year.

For the second straight year, higher education took the biggest hit. Corbett proposed cuts averaging 30 percent in aid to state-supported colleges, with $147 million axed for three of the four so-called "state-related" universities: Temple, Pennsylvania State, and the University of Pittsburgh.

Funding for Lincoln University would remain at this year's $11.1 million level. Corbett did not spell out why Lincoln was spared.

The 14 universities in the Pennsylvania State System of Higher Education, including West Chester and Cheyney, would see state funding drop from $412 million to $330 million, a 20 percent decrease.

To be sure, all the proposed cuts now become the subject of debate and negotiation in the Republican-controlled legislature, which last year restored much of the college aid that Corbett had proposed to slash in his first budget.

Saying he wants to "rightsize" the welfare system, Corbett is also calling for eliminating a $300 million program that provides temporary cash assistance to more than 60,000 residents who don't qualify for disability payments. The aid - roughly $180 a month - helps those who are temporarily disabled, are victims of domestic violence, or are caring for an elderly parent.

Michael Froelich, a staff attorney with Community Legal Services, said ending such aid would be "morally and economically wrong and will eliminate subsistence benefits for the most vulnerable."

As Budget Secretary Charles Zogby laid out the grim fiscal picture before Corbett's address, about 200 protesters wearing T-shirts that said "Gov. Corbett whose side are you on?" lined the hallway in the Capitol's East Wing. "Gov. Corbett is showing that he's siding with the corporations," said Jess Burgan of the group Fight For Philly.

But some Pennsylvanians said Corbett is doing what he must.

"I think most people would agree that it's a painful budget, but unfortunately the state's economic condition makes it necessary," said Jim Broussard, 70, a political science professor at Lebanon Valley College. "I think Corbett is frankly following the advice of [President] Obama from a year ago when he said that it would be economic madness to raise taxes when the economy is bad."

Basic aid for K-12 education receives a slight boost in Corbett's plan, from $5.3 billion this fiscal year to $5.4 billion, but would lose $100 million in grants widely used to help fund full-day kindergarten and other programs.

The fact that Corbett did not mention school vouchers or liquor privatization - two themes he pounded last year - went unexplained.

His plan says little about an "impact fee" on natural gas drilling in the Marcellus Shale. But a long-awaited agreement on such a fee cleared the Senate on Tuesday morning, delaying his speech - and the governor, who has steadily opposed taxing drillers, noted that legislators were "reaching a consensus on ways to address impacts in the Marcellus Shale regions."

Corbett wants deep cuts in the Agriculture Department and to roll two high-profile Rendell-era programs - the Health Care Cost Containment Council and Patient Safety Authority - into the Health Department. He announced several job-growth initiatives, such as the Targeted Industry Cluster Certification Program, to provide training for jobs in energy and agriculture.

He said his plan responds to realities and encourages job growth.

"Difficult economies do not follow calendar years. Nor do they respect state borders. They require us to map state-level solutions to a national problem," he said. "Despite a catalog of quick fixes at the federal level, and a swirl of conflicting theories, we are still living through the most difficult economic period in our lives."

INSIDE

Colleges prepare to push back on 30 percent funding cut. A12.

Budget holds line on public education, with the exception of early childhood grants. B1.